Question

At June 30, 2017, the end of its most recent fiscal year, Sheffield Computer Consultants’ post-closing trial balance was as follows:

		Debit		Credit
Cash		$5,650
Accounts receivable		1,300
Supplies		750
Accounts payable				$430
Unearned service revenue				1,210
Common stock				3,900
Retained earnings				2,160
		$7,700		$7,700

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Sheffield conducted the following transactions during July 2017, and adjusts its accounts monthly.

July	1		Purchased equipment, paying $4,800 cash and signing a 2-year note payable for $21,600. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month.
	2		Issued 21,600 shares of common stock for $54,000 cash.
	3		Paid $3,600 cash for a 12-month insurance policy effective July 1.
	3		Paid the first 2 (July and August 2017) months’ rent for an annual lease of office space for $4,300 per month.
	6		Paid $4,100 for supplies.
	9		Visited client offices and agreed on the terms of a consulting project. Sheffield will bill the client, Connor Productions, on the 20th of each month for services performed.
	10		Collected $1,300 cash on account from Milani Brothers. This client was billed in June when Sheffield performed the service.
	13		Performed services for Fitzgerald Enterprises. This client paid $1,210 in advance last month. All services relating to this payment are now completed.
	14		Paid $430 cash for a utility bill. This related to June utilities that were accrued at the end of June.
	16		Met with a new client, Thunder Bay Technologies. Received $13,000 cash in advance for future services to be performed.
	18		Paid semi-monthly salaries for $11,900.
	20		Performed services worth $30,200 on account and billed customers.
	20		Received a bill for $2,400 for advertising services received during July. The amount is not due until August 15.
	23		Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,800 of revenue from the cash advance received July 16.
	27		Received $16,200 cash from customers billed on July 20.

Adjustment data:

1.		Adjustment of prepaid insurance.
2.		Adjustment of prepaid rent.
3.		Supplies used, $1,350.
4.		Equipment depreciation, $550 per month.
5.		Accrual of interest on note payable.
6.		Salaries for the second half of July, $11,900, to be paid on August 1.
7.		Estimated utilities expense for July, $860 (invoice will be received in August).
8.		Income tax for July, $1,300, will be paid in August.

Prepare a post-closing trial balance at July 31.

SHEFFIELD COMPUTER CONSULTANTS Post-Closing Trial Balance

Answer 1

Post Closing Trial
	Debit	Credit
Cash	$           56,720
Accounts Receivable	$           14,000
Supplies	$             3,500
Prepaid Insurance	$             3,300
Prepaid Rent	$             4,300
Equipment	$           26,400
Accumulated depreciation		$                 550
Accounts payable		$              3,260
Unearned Service Revenue		$              2,200
Interest Payable		$                 108
Salaries Payable		$           11,900
Income Tax Payable		$              1,300
Notes payable		$           21,600
Common Stock		$           57,900
Retained Earnings		$              9,402
Total	$        108,220	$         108,220